Over the course of many years, we
have reviewed hundreds of investment
portfolios. We’ve come away
from that experience with several
common findings that will be shared
here. Review this page completely
and then ask yourself honestly if
any of these scenarios could apply
to you.
If you find yourself acknowledging
that one or more of these situations
has been or still is a personal experience,
contact
us for a no obligation,
no cost, full review of your investment
portfolio. We will
provide an objective, reasoned analysis
of your current investment portfolio
based on your individual needs and
objectives.
Is this you?
Return
expectation – many investors
base their return expectations on
the past performance of a particular
investment, despite knowing that it’s
not a useful indicator.
Risk tolerance
– many investors misunderstand
their own risk tolerance for portfolio
or position volatility…usually
believing their tolerance for volatility
is higher than it actually is. This
has also been called “statement
shock”.
Time horizon
– many investors mismanage their
portfolio time horizon based on their
portfolio returns as opposed to the
specific needs and objectives of the
investment portfolio. This is also
known as managing a 10 year portfolio
on a weekly basis.
Diversification
- many investors believe diversification
involves placing portfolios with different
institutions ensuring they don’t
“have all their eggs in
one basket”. True diversification
starts with different asset classes.
Our observations suggest investors
are over diversified as much as they
are under diversified not really
knowing what is appropriate.
Anchoring
– many investors become emotionally
attached to portfolio positions
based entirely on their individual
performance, good or bad, happy
or sad.
Advice
channels – many investors
receive investment advice from print
media, television, the coffee shop
and their neighbor’s uncle’s
gardener etc. The alleged investment
recommendations leave the investor
feeling “left out”
because everyone would have you
believe they’re making 9000%!
The most important initial observation
that investors must understand is
portfolios that fall short of their
own expectations...
